Canada will continue to be a retail haven for large U.S. chains and developers from around the world. According to Colliers International’s 2012 Spring Retail Report, Canada offers developers a stable marketplace with untapped growth potential. Strong mall productivity performance that significantly outpaces the U.S. and growing Canadian per capita retail spending are key factors that help lure global and U.S. investors looking for expansion opportunities north of the border.

The Colliers report notes that over the past year, Canadian shopping malls have been outperforming their U.S. counterparts by almost 50 per cent in sales per square foot. While the average mall performance in the U.S. was slightly above US$400 per square foot in 2011, Canadian malls yielded an average of nearly US$600 in sales per square foot, bouncing back faster and higher from the 2009 recession and further increasing the productivity gap between the two markets. At the same time, the Canadian per capita retail spending rate is growing steadily, nearly matching U.S. levels hovering around US$12,000.

“The strong fundamentals of the Canadian economy and retail sector in particular have been well noticed by domestic and foreign players,” says Drew Keddy, vice president and national retail leader with Colliers International. “It is no surprise that emerging players from the development side such as Tanger Outlets, Simon Properties, Kimco and even London-based McArthurGlen are establishing a Canadian presence.”

According to Colliers’ analysis, retailers and developers looking for growth opportunities and an increased national presence would be wise to include Western Canada in their expansion plans. The provinces of Alberta, British Columbia and Saskatchewan led all provinces with average annual growth rates of 2.1 per cent, 1.4 per cent and 1.3 per cent, respectively, between the 2006 and 2011 Census years. Add to that, per capita retail sales well above the national average (particularly in Alberta and Saskatchewan, which lead the nation in spending levels) and strong support for further retail development and expansion potential become clear.

“The sheer size and steady growth of both Ontario and Quebec will continue to generate the need for new retail supply. Western Canada, however, represents a critical battle ground for Canadian market share, for both retail chains and developers,” adds David Bell, senior associate with Colliers International. “Strong economic and population growth rates, coupled with a shortage of appropriate space over the short-term ensures the competition for retail space and Canadians’ spending is going to intensify.”